Do I need a Will or a Trust?

One of the first questions people ask me is whether they need a will or a trust.

Usually, the honest answer is: it depends.

That may sound like classic lawyer language, but there really is no single estate plan that makes sense for everyone. Some families are perfectly well served by a good will-based plan. Others have circumstances that make a revocable living trust worth the additional cost and effort.

The goal is not to buy the fanciest estate plan available. The goal is to choose the simplest plan that actually does what you need it to do.

What Does a Will Do?

A will allows you to decide who receives your property after your death. It also lets you name the person who will handle your estate and nominate guardians for your minor children.

A will can also create trusts for children or other beneficiaries who should not receive their inheritance all at once. That matters because handing a large inheritance directly to an 18-year-old is rarely anyone’s best idea.

A will-based estate plan is often a good fit for people who:

• Have relatively straightforward assets

• Want to name beneficiaries

• Need to nominate guardians for minor children

• Want to create inheritance protections for their children

• Are comfortable with their estate going through probate

Here is the important part: having a will does not avoid probate.

A will gives instructions for the probate process. After death, the will is generally submitted to the probate court, and the personal representative handles the estate under that process. South Carolina law provides for the probate and administration of wills and estates through the probate court system.

That does not automatically make a will a bad option. Probate is not a four-letter word—although people on social media sometimes act like it is.

For many families, a properly prepared will-based plan is practical, affordable, and completely appropriate.

What Does a Revocable Living Trust Do?

A revocable living trust is a legal arrangement you create during your lifetime.

You transfer assets into the trust and typically continue managing them yourself. Because the trust is revocable, you generally retain the ability to amend or revoke it while you are living and competent. South Carolina law expressly recognizes revocable trusts and provides rules for amending and revoking them.

After your death, the successor trustee you selected can manage and distribute the trust property according to your instructions.

The primary appeal is that assets properly titled in the trust can generally be administered without passing through the probate estate.

The phrase properly titled is doing a lot of work there.

Creating a trust and then failing to put assets into it is like buying a safe and leaving everything valuable on the kitchen counter. The document exists, but it is not doing the job you bought it to do.

A trust-based plan may make sense for people who:

• Want to reduce the amount of property passing through probate

• Own real estate in more than one state

• Want greater privacy in the administration of their assets

• Want to make things easier for loved ones after death or incapacity

• Want a more coordinated plan for their property and beneficiaries

• Are willing to complete and maintain the trust-funding process

Does Everyone Need a Trust?

No.

Revocable living trusts are useful tools, but they are not magic. They do not automatically eliminate taxes, protect your assets from every creditor, or make every family dispute disappear.

They also require more work than a will-based plan. Assets must be reviewed, properly coordinated, and—when appropriate—transferred into the trust.

That additional work can be worthwhile. But it should solve an actual problem.

I do not believe in recommending a more expensive trust package simply because trusts sound sophisticated. If a will-based plan meets your needs, I will tell you that. You should not pay for more legal planning than your family actually needs.

What Happens If You Have Neither?

If you die without a valid will, South Carolina’s intestacy laws determine who receives property that passes through your estate. In other words, the state provides a default estate plan for you.

The state’s plan may happen to resemble what you wanted.

It may also be completely different.

It does not know which family member you trust to handle your affairs. It does not know who you would choose to care for your children. It certainly does not know whether your 18-year-old should receive a substantial inheritance outright.

That is why almost everyone should have some form of estate plan, even when a trust is unnecessary.

So, Which One Do You Need?

A will-based plan may be enough when your situation is straightforward and you are comfortable with probate.

A trust-based plan may be worth considering when avoiding probate, managing property in multiple states, planning for incapacity, or simplifying administration is especially important to you.

The right answer depends on your family, your assets, and what you want the plan to accomplish.

Fortunately, you do not need to figure all of that out before speaking with an attorney. That is what the consultation is for.

Let’s Keep It Simple

Estate planning should not feel like studying for an exam you did not know you signed up for.

During your consultation, I will learn about your family and assets, explain the practical differences between a will and a trust, and help you choose the plan that makes sense for you.

Not sure whether you need a will or a trust?

This article provides general information about South Carolina estate planning and is not legal advice. Reading it does not create an attorney-client relationship.